Takeda and Eli Lilly to pay a combined $9 billion in drug damages

A U.S. jury has determined that Takeda Pharmaceutical Co. and Eli Lilly & Co. conspired to hide cancer risks associated with the diabetes drug Actos. The drug makers will face a total of $9 billion in punitive damages as a result, with Takeda stock taking a heavy hit following the news.

The ruling came on April 8 and was the most recent in a series of decisions that required Takeda to pay punitive damages to patients. Takeda is responsible for $6 billion of the damages, with its marketing partner Eli Lilly ordered to pay $3 billion.

According Actos’ warning label, there is an additional risk of bladder cancer associated with the drug’s use. However a study of the drug showed that long-term users had up to a 40 percent higher risk of developing cancer. The suit alleges that the Takeda and Lilly did not do enough to warn users of this potential issue.

"We are confident in the therapeutic benefits of Actos and its importance as a treatment for Type 2 diabetes," said Kenneth D. Greisman, senior vice president of Takeda's U.S. unit said to the WSJ.

Actos entered the market in 1999 and quickly became the crown jewel of Takeda’s offerings, raking in an estimated $3.85 billion annually, according to the Wall Street Journal. However following the expiration of the drugs patent in 2011 and wavering interest in the product, Takeda has struggled in recent years to recoup lost profits. Add to that the fact that sales of Actos have been halted in Germany in France as a result of cancer concerns.

Takeda is facing thousands of other lawsuits as a result of cancer concerns surrounding the drug. Mounting legal fees and dwindling sales have some analysts concerned about the company’s future.